Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:

When the price elasticity of supply is equal to zero..................

Options:

Supply curve is sloping downward.

Supply curve is horizontal.

Supply curve is upwards sloping.

Supply curve is vertical.

Correct Answer:

Supply curve is vertical.

Explanation:

The correct answer is Option (4) → Supply curve is vertical.

Price Elasticity of Supply (PES) measures how much the quantity supplied changes in response to a change in price.

  • When PES = 0, it means that no matter how much the price changes, the quantity supplied remains constant.

  • This is called perfectly inelastic supply.

  • A vertical supply curve represents this situation — quantity supplied is fixed, and does not respond to price changes.